More Battery Suppliers Do Not Mean a Rejection of CATL
China’s electric vehicle manufacturers are broadening their supply chains and increasingly developing their own battery systems. This has given rise to the narrative of so-called de-CATLization—that is, a deliberate move away from CATL, the world’s leading battery manufacturer.
A media outlet under China’s Ministry of Industry and Information Technology disputes this interpretation. Additional suppliers and in-house development departments are normal business decisions, it argues, rather than an attack on established cell manufacturers.
Diversification strengthens the supply chain, but it does not automatically mean that market leaders are being displaced.
This assessment does not represent new regulation, but primarily an industrial policy signal. China wants to promote competition while preventing short-term cost targets from damaging technological cooperation and long-term quality.
CATL Continues to Hold More Than 40% Market Share
So far, there is no sign of CATL actually being displaced. In August 2026, CATL accounted for 41.45% of traction batteries installed in China. In July, its share was 42.33%.
| Category | Current Status |
|---|---|
| CATL market share in August 2026 | 41.45% |
| CATL market share in July 2026 | 42.33% |
| Li Auto | In-house battery development, with manufacturing through a joint venture with Sunwoda |
| Xiaomi | Sources batteries from CATL, FinDreams, CALB, and Sunwoda |
The slight decline indicates greater competition, but not a major loss of power. CATL continues to have enormous production capacity, extensive development resources, and long-standing relationships with many automakers.
At the same time, the Chinese market is increasingly shifting toward lower-cost LFP cells. Our look at the Chinese battery market and the share of LFP batteries shows how pronounced this trend has already become.
An In-House Battery Is Not Necessarily an In-House Cell
The commentary is particularly critical of claims that batteries have been developed entirely in-house. An automaker can design the battery pack, cooling system, power electronics, and battery management system itself without developing or producing the actual cell.
According to Li Auto, the company has been working on 5C cells, battery packs, and battery management systems since 2020. These solutions are already used in several models. Manufacturing, however, is handled by a joint venture with Sunwoda.
This is not an unusual model. Joint development can combine an automaker’s expertise with the industrial experience of a cell manufacturer. It becomes problematic only when partnerships are marketed as entirely in-house developments.
Price Pressure Must Not Come at the Expense of Safety
The greater concern is the price war in the upstream supply chain. Manufacturers can negotiate better terms and reduce dependencies by using multiple sources. However, if batteries are selected almost exclusively on the basis of purchase price, there is a risk of cost-cutting in quality control, material selection, and long-term testing.
A low cell price does not automatically mean low total costs. Premature aging, higher rejection rates, or recall risks can quickly erase the initial advantage. Cheaper battery → potentially higher follow-up costs if quality and production consistency fail to keep pace.
At the same time, intense competition remains an important driver of innovation. New cell designs enable higher charging power and shorter charging stops, as demonstrated by the LFP flash-charging battery in the BYD Seal 06. What matters is that such advances can be reproduced reliably and safely and made available at scale.
What This Development Means for Europe
For customers in Germany, Austria, and Switzerland, a broader supplier base is generally positive. Greater competition can reduce vehicle prices, mitigate production disruptions, and improve access to different cell chemistries.
However, this also makes it harder to determine a battery’s origin from the car’s brand name. Even within a single model line, battery cells from different manufacturers may be used depending on the factory, production period, or variant. Warranty terms, charging performance, thermal management, and transparent quality standards therefore remain crucial.
Despite growing competition, CATL is likely to retain a central role. The Chinese market is not necessarily moving away from the industry leader, but toward a broader network comprising CATL, BYD, CALB, Sunwoda, and other manufacturers. This competition is beneficial as long as it focuses on technology and efficiency rather than compromises in safety and durability.
